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IRS Relieves Retailer Headache

by | 29 Jan | Uncategorized

Another victory claimed by small-business representatives recently, as the IRS told the National Federation of Independent Business it would not require retailers and others to explain how and why their business income differs from their credit-card receipts, which Congress now is requiring card companies to report separately to the IRS.

“There will be no reconciliation required” for the 2012 tax year, “nor do we intend to require reconciliation in future years,” said a letter to NFIB from IRS Deputy Commissioner Steven Miller.

Small businesses have scored several victories lately against efforts in Congress to increase their tax reporting requirements and ultimately their tax payments. Critics say small businesses too often are underpaying their taxes, because of the ease of under-reporting income. Small business representatives say the remedy of increased reporting imposes too much paperwork burden on owners. They argue that tax compliance costs already are too high – almost $1,600 per employee for firms with fewer than 20 employees, according to NFIB.

In the case of the credit-card payments, the NFIB argued that small retailers often can’t readily account for ancillary payments such as cash-back payments to customers.

An even bigger victory came last year, when Congress rolled back a provision of the 2010 health-care law that would have required businesses to provide a 1099 information return to the IRS for any expenditures over $600 in a calendar year. Critics said that would have created a huge new paperwork burden and stifled job creation.

Since 1938, Zinner has counseled individuals and businesses from start-up to succession. At Zinner, we strive to ensure we understand your business and recognize threats that could impact your financial situation.
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